Reference no: EM133000902
Questions -
Q1. On June 30, 2020, Hello Company issued at 99, five thousand bonds of 8%, P1,000 face amount. The bonds were issued through an underwriter to whom the entity paid bond issue cost of P425,000. June 30, 2020, what amount should be reported as bond liability?
Q2. On November 1, 2020, Mill Company issued P5,000,000 of 10-year, 6% term bonds dated July 1, 2020. Interest is paid every June 30 and December 31. What amount of accrued interest on November 1, 2020?
Q3. What amount should be recorded as bond issue costs to be amortized over term of the bonds?
During the current year, Eddie Company incurred the following costs connection with the issuance of bonds:
Promotion cost 350,000
Printing and engraving 140,600
Legal fees. 730,780
Fees paid to independent accountants for registration. 120,000
Commission paid to underwriter. 1,500,700
Q4. On March 1, 2020, Coco Company issued at 103 plus accrued interest 4,000 bonds of 9%, P1,000 face amount. The bonds are dated January 1, 2020 and mature on January 1, 2030. Interest is payable semiannually on January 1 and July 1. The entity paid bond issue cost of P190,000. What is the net cash received from the bond issuance?
Q5. On January 1, 2020, Essay Company received P1,077,200 for 12% bonds with face amount of P1,000,000. The bonds were sold to yield 10%. Interest is payable semiannually every January 1 and July 1. What amount should be reported as interest expense for 2020?
Q6. On January 1, 2020, Well Company issued 9% bonds in the face amount of P5,000,000 which mature on January 1, 2030. The bonds were issued for P4,695,000 to yield 10%. Interest is payable annually on December 31. The entity used the interest method of amortizing bond discount.
a. What amount should be reported as interest expense for 2020?
b. What is the discount on bonds payable?
c. On December 31, 2020, what is the carrying amount of the bonds payable?
Q7. On January 1, 2020, Life Company issued 10% bonds in the face amount of P5,000,000 which mature on January 1, 2030. The bonds were issued for P5,675,000 to yield 8%. Interest is payable annually on December 31. The entity used the interest method of amortizing bond.
a. What is the amount of discount or premium on bonds payable?
b. What amount should be reported as interest expense for 2020?
c. On December 31, 2020, what is the carrying amount of the bonds payable?